Patagonia Gold Regulatory News (PGD)

4 Oct 2007 07:00

Patagonia Gold PLC04 October 2007 PATAGONIA GOLD PLC Trading Symbol PGD.L RESOURCE STATEMENT-LOMADA DE LEIVA PROPOSED WORK PROGRAM 2007 Lomada de Leiva Gold Resource: Chlumsky, Armbrust and Meyer, LLC. (CAM) of Lakewood, Colorado, was retained byPatagonia Gold PLC (PGD) to independently define and describe a gold Resource atLomada de Leiva, Santa Cruz Province, Argentina, which complies with CanadaNational Instrument 43-101 (NI 43-101). Resource estimates at 0.30 grams per tonne gold (Au) cut-off for Lomada de Leivaare: Measured and Indicated at 161,346 ounces Au. and additional Inferred Resourcesof 73,725 ounces Au. Lomada de Leiva Project The Lomada de Leiva Project, together with the adjacent Breccia Sofia Prospect,is located on the La Paloma property block and is approximately 40km to thesouth of the town of Perito Moreno in the Santa Cruz province of Argentina. A drilling campaign, consisting of 62 drill holes for 8,862 metres (m),commenced in February of this year, was completed by PGD on the 100% ownedLomada de Leiva Project. The drilling was designed to validate historical drilldata and to infill and extend the existing resource for definition to CanadianNational Instrument 43-101 standards. PGD is very encouraged with the above results. The Project team has successfullyadvanced Lomada de Leiva from acquisition, in February of this year, through asubstantial drill programme to NI 43-101compliant Resource status in just 6months. This is not only an outstanding achievement for the team butdemonstrates the robust potential of the Project. Furthermore, two thirds of the resource has been categorized as 'measured andindicated' thus substantially reducing the additional amount of drillingrequired to advance this deposit towards Reserve status. These results supported with the high potential to develop additional resourcesat; Lomada de Leiva, the adjacent Breccia Sofia and nearby Cerro Vasco aresufficiently encouraging for PGD to advance this Project towards possibleproduction. Scoping Study: Accordingly, PGD intends to appoint Independent Engineers toundertake a Scoping study (preliminary assessment) to determine potentialeconomics for mining Lomada de Leiva and to identify the target resource basethat will support mining on that project. The following table and comments are extracts from CAM's Report +-------------------------------------------------------------+|Table 1-1 || ||Resource Totals |+-----------------+---------+---------+---------+-------------+|Resource Type | Cut-off| Tonnes| Au Grade| Contained Au|| | | | (g/t)| (Troy oz)|| | (g/t Au)| | | |+-----------------+---------+---------+---------+-------------+| | | | | |+-----------------+---------+---------+---------+-------------+|Measured | 0.30|1,427,628| 1.125| 51,633|+-----------------+---------+---------+---------+-------------+|Indicated | 0.30|3,574,388| 0.955| 109,713|+-----------------+---------+---------+---------+-------------+|Measured + | 0.30|5,002,016| 1.003| 161,346||Indicated | | | | |+-----------------+---------+---------+---------+-------------+|Inferred | 0.30|3,412,271| 0.672| 73,725|+-----------------+---------+---------+---------+-------------+| | | | | |+-----------------+---------+---------+---------+-------------+|Measured | 0.50| 951,843| 1.491| 45,630|+-----------------+---------+---------+---------+-------------+|Indicated | 0.50|2,315,170| 1.261| 93,859|+-----------------+---------+---------+---------+-------------+|Measured + | 0.50|3,267,013| 1.328| 139,489||Indicated | | | | |+-----------------+---------+---------+---------+-------------+|Inferred | 0.50|1,850,623| 0.911| 54,187|+-----------------+---------+---------+---------+-------------+| | | | | |+-----------------+---------+---------+---------+-------------+|Measured | 1.00| 454,530| 2.357| 34,451|+-----------------+---------+---------+---------+-------------+|Indicated | 1.00|1,035,423| 1.958| 65,194|+-----------------+---------+---------+---------+-------------+|Measured + | 1.00|1,489,953| 2.080| 99,645||Indicated | | | | |+-----------------+---------+---------+---------+-------------+|Inferred | 1.00| 456,543| 1.628| 23,890|+-----------------+---------+---------+---------+-------------+ Exploration, mainly drilling and trenching, have been carried out to industrystandards including the analysis, quality assurance and quality control effortsapplied to the exploration work. The delineated significant interceptsindicating the gold mineralization has been verified and substantiatedsufficiently to pursue a resource calculation for the Lomada Leiva project. Oxide mineralization of potentially economic grade is present from surface to atleast 60-meter depth. Resource estimates at 0.3 grams per tonne Au cutoff forLomada Leiva are Measured and Indicated at 161,346 ounces Au. Inferred Resourcestotal 73,725 ounces Au. The potential for further mineralization at Lomada de Leiva includes addeddefinition along strike as well as the potential for offsets along strike andparallel structures (as suggested by CSAMT interpretations). The depth of the mineralization is fairly well defined at 200 meters verticaldepth, however there are possibilities for additional discovery at depthespecially in the southern portion of the defined ore body where isolatedlow-grade (greater than 5 ppm Au) chalcedonic veins may be followed to depth inanticipation of enhanced grade with the intersection with the main mineralizedstructure. Bottle Roll and other tests are in progress for the Lomada Leiva samples.Preliminary results of bottle roll tests indicates an average of 71 percentextraction in 6 hours and 85 percent extraction in 12 hours for oxidized mineralmaterial, derived from sample. Testing is continuing. CAM believes the resource model is suitable for preliminary mine design, andrecommends the following actions to facilitate the conversion of the Resource toa Reserve: 1. Perform two preliminary pit designs. One, based on Measured and Indicated Resources, and the other on Measured plus Indicated plus Inferred Resources. On the basis of these designs, one or two holes should be drilled on each section above and below the pit bottom to define final pit geometry 2 In addition to the pit bottom design holes, review the sections to see if additional drilling is necessary to define the lateral extent of the ore.' End of extracts A follow-up drill programme is planned for Lomada de Leiva after detailedinterpretation of the drill sections and results. In addition the previousControlled source audio frequency magnetotellurics (CSAMT) geophysics survey isto be extended (one of CAM's recommendations) to cover a sub parallel structureas well as the ground to the north of Breccia Sofia. The drill programme will be designed to increase the exiting resource potentialas well as elevating the known resource categories. Breccia Sofia Breccia Sofia is considered part of the same mineralised felsic dome system thathosts the Lomada de Leiva breccia-vein structure. However at Breccia Sofia thereare also high silver values with previous drilling reporting values of 3m @140.6g/t gold, including 1m of 401g/t gold and 1,095g/t silver in drill-holeDDH-LP42. 17 reverse circulation (RC) holes were drilled by PGD at Breccia Sofia,infilling and extending the previous drilling. Results not previously reported include +---------+----------+----------+---------+ |Drill |From |Interval |Gold | |Hole No. |Metres |metres | | | | | |g/t | +---------+----------+----------+---------+ |BSR-07 |79.0 |2.0 |3.02 | +---------+----------+----------+---------+ |BSR-12 |55.0 |5.0 |2.48 | +---------+----------+----------+---------+ |and |75.0 |4.0 |2.16 | +---------+----------+----------+---------+ |BSR-14 |70.0 |3.0 |4.44 | +---------+----------+----------+---------+ |BSR-15 |38.0 |3.0 |2.85 | +---------+----------+----------+---------+ |and |48.0 |5.0 |17.49 | +---------+----------+----------+---------+ |BSR-16 |25.0 |7.0 |2.61 | +---------+----------+----------+---------+ |and |42.0 |3.0 |3.33 | +---------+----------+----------+---------+ |BSR-17 |31.0 |4.0 |1.90 | +---------+----------+----------+---------+ |and |42.0 |2.0 |7.56 | +---------+----------+----------+---------+ The values indicate that a broad zone of gold grades >1g/t gold exists on strike500m from the Lomada de Leiva resource area. Drill holes BSR15-16-17 are themost southerly line drilled targeting a structure sub parallel to the Lomada deLeiva trend and 100m south of the nearest drill line. This structure is 550m along the inferred strike from the drill hole DDH-LP42and is open to the south and down dip. Currently drill sections are being interpreted and preparations made for a CSAMTgeophysics survey in order that a follow up drill programme can be prepared. Cerro Vasco PGD 'Property 28' (Cerro Vasco) is located 8km to the north of Lomada de Leivawithin the same regional structural corridor. The main zone, Brecha Emilia,comprises a brecciated gold-mineralized structure of 1,200metre strike lengthand has similar characteristics to the Lomada de Leiva breccia-vein system.Mapping of the central part of the structure and systematic rock chip samplinghas been carried out by PGD. Gold values in the region of 3g/t to 4g/t werereported and included a sawn channel intersection of 2.85m @ 44.2 g/t gold. The Santa Cruz Mines department has approved the Environmental Impact Assessmentfor a drill programme at Cerro Vasco. Exploration Programme for the second half of 2007 The exploration programme for second half of 2007 includes a proposed 10,000metre drill programme scheduled to commence in October. Two drill contracts havealready been signed and all environmental approvals granted. At Breccia Sofia3,000 metres will infill and extend existing drilling in order to quantify thispotential resource adjacent to Lomada de Leiva; a further 3,500 metres isallocated for La Manchuria to infill the Main Zone for production of a NI 43-101compliant resource and 3,500 metres for Breccia Valentina and Cap Oeste ontargets defined by recent validation and exploration. Shareholders will be kept regularly informed by press releases over the ensuingmonths with respect to the progress on the drilling and exploration programmes. Marc Sale, (BSC. Geology, Fellow AusIMM, member AIG) a Director and consultantto Patagonia Gold Plc and a qualified person as defined in National Instrument43-101, has reviewed and verified all scientific or technical mining disclosurecontained in this press release. Mr. Robert L Sandefur, P.E. Consultant Engineer with Chlumsky, Armbrust andMeyer, LLC and the author of the report entitled " NI 43-101 Compliant TechnicalReport Lomada Leiva Project Santa Cruz Province, Argentina" prepared forPatagonia Gold Plc, dated 31 August, 2007, is the Qualified Person in accordancewith the requirements of the Canadian National Instrument 43-101. ENDS For more information, please contact: Bill Humphries/Richard Prickett Anthony Cardew/Tim RobertsonPatagonia Gold Plc Tel: +44 (0) 20 7930 0777Tel: + 44 (0)2 7409 7444 Fax: +44 (0) 20 7925 0647www.patagoniagold.com Email: tim.robertson@cardewgroup.comTrading Symbol PGD.L This information is provided by RNS The company news service from the London Stock Exchange